Fletchers Group looks forward to ‘unprecedented opportunities’ following year of transformation
Fletchers Group has announced a resilient financial performance for the year ended 2022, as it transferred to new PE ownership and commenced a new strategy of growth through acquisition.
Peter Haden, group CEO, said the results reflected the one-off costs of a change in ownership, the reshaping of the PI business, and significant investment in signing more recruits and more cases following the investment by Sun Capital, which acquired Fletchers in October 2021 with an ambition to build scale.
Fletchers Group posted a small annual statutory loss of £200K (2022), down from £5.2m (2021), largely accounted for by transaction costs relating to the sale of the business and increased investment in growth.
He said: “We are making great progress on the two elements of our strategy: rapidly growing the business through investment in signing more cases and acquiring other firms, and making Fletchers smarter by investing in technology and improving our colleague proposition. These will be our priorities during the next 12-18 months.”
“We saw around a twenty percent increase in signed cases between 2021 and 2022 with growth in both medical negligence and personal injury.”
He added: “We’ve achieved this by investing more in digital marketing, and inorganically, through the deal to buy Cycle SOS in May, and our new partnership with Cycling UK.”
In September last year Fletchers announced it had acquired Leeds-based medical negligence law firm Minton Morrill to leverage its capability in high value medical negligence claims and build out a nationwide footprint.
Haden said: “Bringing new colleagues into the group with genuine expertise is accretive; there is no real limit to the number of lawyers we can hire because they boost our earnings from day one.”
In October 2022, specialist case acquisition business Blume also joined the Group following investment from owners Sun Capital Partners, in a deal Haden described as wholly complementary both from a cash position, to strengthen the group’s use of technology, both as suppliers to law firms and for clients needing access to the law.
Turning to the next twelve months, he said: “We are targeting more deals this year, to strengthen the group’s capabilities, extend our geographic reach, and to bring new colleagues on board. The market is consolidating post reform, and many current owners are looking for a lifestyle change following the pandemic.”
“On organic growth, where we have equal focus, we are receiving more cases from new partners/suppliers. We’re building out our cycling expertise and looking for partnerships with serious injury charities. The financial support from Sun Capital enables us to invest more in both sourcing cases, and then running them over several years.”
Haden also pointed to a recent restructure of the serious injury team under the leadership of Caroline Morris, which, he said: “will aim to double in size during the next two/three years and grow the proportion of serious injury cases relative to the rest of the portfolio.”
On technology, Haden explained that improving collective productivity is driving the Group’s investment in technology. “Fletchers has been paperless for a long time, and is moving lock stock and barrel to the cloud, but I want us to be famous for ‘using technology to enable our best lawyers on a daily basis,’ as opposed to just talking about the latest tech buzz words.”
He cited a team of data scientists that has been working with Liverpool University since 2018 on a machine learning application that supports the legal teams to reduce the time and effort required to decide on whether to take on new cases . Haden explained that the technology is already being used at scale to drive insight and speed up the process.
“For example teams that tend to submit case particulars (as opposed to gathering all the material before submission) quickly tend to get a faster settlement time, with no reduction in success rate.”
“Getting hold of medical records is time consuming, and the material is not standardised. We have a great team of thirty nurses that assess our clients’ medical records and identify the key facts that matter to their case. We’ve invested in technology that assists the process, categorises the material and works out where the interesting medical points are.”
“The result is a higher win rate for cases, and faster settlement, giving us the opportunity to grow our volumes.”
Haden said the that Fletchers had grown its FTEs by 120 last year to 520, working from Manchester and Southport. The Minton Morrill deal has created a new base in Leeds, where there are plans for further recruitment, and Fletchers will open new space in Liverpool this year. In addition, 100 new colleagues have joined the group following the Blume deal.
Experienced legal entrepreneur Zoe Holland has also joined the Group in a new role as Chief Commercial Officer. One of the UK’s most seasoned practitioners in mergers and acquisitions, business growth and operational due diligence matters, she has advised on some of the sector’s highest profile transactions in recent years, and in her new role she will help Fletchers identify attractive M&A opportunities and develop new businesses.
Peter Haden continued: “We have moved to flexible and hybrid working as standard and have seen improvements in productivity. Just as importantly, our flexible approach really works for our employees, many of whom who are under 35. We want to be an attractive employer to Gen Z talent who take a keen interest in our approach to CSR and diversity. The law is a conservative sector in respect of these issues, but we are determined to be a pathfinder.”
Haden also flagged the decision to award partnerships to 12 legal professionals, “in order to attract and retain great legal talent, and to improve career satisfaction for our existing teams.”